Managing Outrage (and Stalling Reforms)

Oil derrickAs gas and food prices rise, so does scrutiny of industry profits. But "food and energy companies have learned a lot since the 1970s about how to deal with public indignation," writes George Anders. In 1980, "Congress hit the energy industry with a windfall profits tax" that lasted until 1988. While Congress is holding hearings now, oil executives "are better at deflecting attention from their own companies, arguing that state-owned, foreign oil companies control most of the world's reserves, and that financial speculators" drive price fluctuations. As they prepare to announce their first-quarter 2008 earnings, Exxon Mobil executives are "hammering out possible responses to questions ... about the sheer size of the company's profit." The largest U.S. ethanol producer, Archer Daniels Midland, is holding conference calls decrying the "misguided attacks on biofuels," to "avoid being portrayed as the villain in rising farm-product prices." Oil companies "have hired plenty of lobbyists and supported trade groups, such as the American Petroleum Institute. ... Food companies may soon find themselves redoubling similar efforts of their own."


From the [ Des Moines Register]:

"It's the speculators," said [Keck Oil president Mark] Meyer, whose company supplies gasoline from refinery pipelines to service stations throughout Des Moines and central Iowa. "There's no shortage of gasoline supplies, and demand is down, so prices should be falling. But there are too many non-oil speculators in the energy markets, and they are driving up the prices."

And two West Virginia papers covered an American Petroleum Institute staffer's talk to the Wheeling Rotary Club. It's at least her second talk to Rotarians in West Virginia this year, oddly enough:

"When you talk about what you pay for the price of gasoline at the pump, you have to remember that 72 percent of it right now is actually the price of crude oil," [Denise McCourt] [ says]. "Crude oil's been trading at about $120 a barrel, just a little below that."

"Contrary to popular belief and what some politicians might say, America’s oil companies aren’t owned just by a small group of insiders," [Denise McCourt] [ said]. "Only 1.5 percent of industry shares are owned by company executives. The rest is owned by tens of millions of Americans, many of them middle class."